Project Summary: An optimal intervention of type 1 diabetes (T1D) should effectively targets the immune system, protects pancreatic ? cells from death, and regenerates ? cells. Currently there are no single intervention can achieve these effects. Novel combined therapies that can take advantages of each single therapy would be beneficial for a complex disease as T1D. The use of mesenchymal stromal/stem cells (MSCs) as a therapeutic tool represents a promising new intervention as increasing evidence demonstrates that MSC therapy can effectively target several injury pathways in a variety of autoimmune and inflammatory diseases, something that most pharmacological interventions cannot accomplish. Following tissue injuries, MSCs exert protective effects through the release of pro-mitotic, anti-apoptotic, anti-inflammatory, and immunomodulatory soluble factors, while mitigating metabolomic and oxidative stress imbalance and restoring homeostasis. MSC infusion reversed diabetes in rodent models and prevents decrease of c-peptide in patients with new onset T1D. In our NIH-funded clinical trial, co-transplantation of autologous MSCs with islets improved glycemic control after transplantation in chronic pancreatitis patients. Our recent studies shown that MSC infusion promote T regulatory cell generation and protect islets from death. However, most human studies using MSC alone have not been successful at sustained suppression of the autoimmune response. Based on the ability of alpha-1 antitrypsin (AAT) to decrease B-cell activating factor, decrease anti-insulin auto-antibodies, promote tolerogeneic dendritic cells and promote Treg function, we propose to combine AAT and MSCs to demonstrate sustained efficacy in humanized mouse models of TID. Based on these studies, the goal of this proposal is to determine whether AAT engineered human MSCs that can target the autoimmune response in T1D in a more sustained way in humanized mouse models. Our central hypothesis is that bile duct infusion of AAT overexpressing MSCs effectively prevents and/or reverses autoimmune diabetes by protecting Tregs from apoptosis and dysfunction and by improving ? cell survival and/or regeneration. We will test this hypothesis by determining the protective effects of MSCs or AAT- MSCs infusion on ? cells and whether AAT-engineered MSCs are more potent for the treatment of diabetes when these cells are co-transplanted with human islets into streptozotocin-induced diabetic humanized NOD/SCID/IL-2?-/- (Hu-NSG) or the NOD mice.